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Official Explains Need for Export-control Reform

WASHINGTON, April 21, 2010  Economic controls have a direct relationship to national security, and Defense Secretary Robert M. Gates says it’s time some of those controls got a makeover.

In a speech yesterday to the Business Executives for National Security, Gates proposed revamping the nation’s Cold War-era export-control system to make it more difficult for critical technologies to get into the hands of rogue states and terrorists while facilitating the transfer of technology to U.S. allies.

James A. Hursch, director of the Defense Technology Security Administration, spoke later in the day about the Defense Department’s position on export controls – the regulations that determine what is and isn’t allowed to be sold abroad by U.S.-based entities – in a “DoD Live” bloggers roundtable.

The export controls in place now were written more than 50 years ago, he explained, in a fundamentally different security environment.

“It was a system designed for the Cold War, bipolar world, and is not sufficiently focused on the most critical threats we face today,” Hursch said.

And because of innovations in technology and the ever-more-global economy, products on the cutting edge aren’t always American any more, he noted. Often, he explained, the U.S. military uses off-the-shelf commercial systems, because the defense industry can’t keep up with the global consumer market.

“There’s a need for a fundamental change to the system we have in place today,” Hursch said. “We have a secretary of defense who realizes the overwhelmingly positive implications of the export control reforms that he advocates, and [understands] that he is doing them for national security reasons.”

Hursch enumerated four essential pieces of the reform effort he called “singles.” The first is a single export control list that clarifies which exports require a license and which do not, as well as the steps to obtain a license to export a product.

“This would be an aggregation of the current United States Munitions List and the current Critical Items Control List that the Commerce Department administers,” he said. “This would be tiered according to the sensitivity or criticality of an item or the technology associated with it.”

The second is a consolidated licensing agency that will help to streamline the review and export processes and make consistent decisions made regarding licenses. Currently, the departments of State and Commerce both have licensing bodies, and they often conflict, Hursch said.

“We spend a lot of time fighting over which of these two authorities should actually control the export of certain items, rather than fighting over how critical or sensitive the item actually is, and therefore whether it should be controlled or not,” he said.

The third part of the proposed reform is a lone agency that would coordinate enforcement efforts and help to monitor, investigate and prosecute violators of export control laws. Many law enforcement organizations now assist in this task, from the FBI to the U.S. Coast Guard and border patrols. This new agency would not replace them, Hursch said, but would ensure those agencies don’t duplicate each others’ efforts.

The fourth aspect of the proposed reform is a unified information technology system to maintain license information and other data pertinent to export control and review license data efficiently across the government. The Commerce, Defense and State departments each have their own network in place now; Hursch said the Defense Department’s system is the newest and likely will form the backbone of the new interdepartmental system.

Making the proposed reforms a reality won’t be a simple task, Hursch acknowledged.

“We realize that fundamental reform requires extensive coordination and consultation with Congress and other interested groups,” he said. “Achieving reform will not be quick or easy.”

As the reform is developed and a package is put together to submit to Congress – Hursch estimated that would happen by the end of the year – Gates and his colleagues at the State Commerce departments will begin making policy changes within their executive-decision purview.

The creation of tiered restrictions, defining which currently controlled items need to be placed among those tiers, determining enforcement techniques and ensuring penalties for violators are appropriate are on the “to do” list, Hursch said. Though many of the reforms will be made along the way through executive orders, he said, the four “singles” will require congressional approval, Hursch said.

The end system would create “higher walls around fewer items,” Hursch explained. Weaponry -- specifically items that could be used to build weapons of mass destruction -- will be very tightly controlled, as would items or information such as schematics or blueprints that could hurt domestic economic interests if exported.

Control won’t necessarily be more lax over certain items, Hursch said, but the tiered system will aid in prioritizing enforcement and in helping agencies differentiate between, for example, export of a controlled food item and a controlled chemical with potentially harmful uses, Hursch said.